UPDATE 1-Spain's Gas Natural, Russian Gazprom sign LNG deal

MADRID, July 21 (Reuters) - Spain's Gas Natural GAS.MC and Russian gas export monopoly Gazprom GAZP.MM have agreed terms allowing them to trade liquefied natural gas (LNG) cargoes quickly in future, the companies said on Monday.

The agreement, signed on July 2, defines general terms for each company to sell the other spot cargoes of LNG and could be extended to include power, carbon and pipeline gas trade.

Gazprom, the biggest supplier of pipeline gas to Europe, has a 51 percent stake in the major Shtokman project in the Barents Sea, which is expected to begin producing 23.7 billion cubic metres of natural gas in 2013 and begin LNG production in 2014.

The Russian company has been expanding into LNG, power and carbon markets through its GM&T subsidiary based in London.

Gas Natural, in partnership with its biggest shareholder Repsol REP.MC, is one of the biggest players in the growing global LNG market.

“When opportunities come and market conditions are favourable, Gazprom Marketing & Trading and Gas Natural SDG will be in a position to execute LNG transactions quickly,” said Frederic Barnaud, GM&T’s LNG Director.

“For us, it is a good opportunity to expand our LNG trading activities ahead of the start-up of the Shtokman project in 2013/4.”

Two thirds of Spain’s gas is brought in by LNG tankers, with the rest coming in by pipeline from North Africa. (Reporting by Daniel Fineren/Jane Barrett, editing by Anthony Barker)